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Stocks Take a Tumble on Obama Win

As the elections were taking place there was a clear divide in the stocks that would benefit from an Obama win, and those that would benefit from a Romney win.

For starters, the hospital space was in rally mode. The Obama win and a continuing split in Congress makes it unlikely the Affordable Care Act will be challenged in any significant way. Obamacare’s health insurance mandate means fewer unpaid bills for hospital care, and names like HCA, up 6%, and Tenet Healthcare, up 4.8%.

On the flip side, coal stocks were getting hammered. Obama and the Democrats have pushed against fossil fuels, a push that shows no signs of abating in a second term for the president. Miners Peabody Coal and Alpha Natural Resources, which caught a rally after Romney won the first debate in early October, dropped 8% and 9.7%, respectively.

The big banks took a beating, reflecting not just Obama’s win, but a victory for consumer finance advocate Elizabeth Warren over Scott Brown in a Massachusetts Senate race. Expectations were that Romney would try to make the Dodd-Frank reform act as toothless as possible, if not revoke it outright, but those hopes appear to be dashed. Goldman Sachs slumped 3.5%, Morgan Stanley fell 4% and JPMorgan lost 3.1%, while their peers fared little better.

It is interesting to note that Jim Rogers and Marc Faber are both very negative about the fact that Obama won. Believing that he will just continue along a similar route to before, printing money, and sending the US deeper and deeper into debt.

THey both expect the markets to fall, and the US economy to decline or even enter recession next year.